Category: Ukraine

Under the EU-Ukraine Association Agreement of June 27, 2014, Ukraine undertook to harmonize its legislation with EU law by 2023, including the regulatory framework for IP. Subsequently, in February 2020, the Parliament of Ukraine adopted a long-awaited set of draft IP protection laws (the “Draft Laws”), which are likely to have a significant impact on companies doing business in Ukraine, as well as on the measures which may be taken by businesses in connection with IP commercialization.

Changes in the Invention and Utility Model

Regulatory Framework

Under Ukrainian law, a utility model must meet two patentability criteria: novelty and industrial applicability. A substantive examination is not involved in the patenting process. This enables an applicant to get a patent at his/her own risk without needing verification by the Ukrainian Institute of Intellectual Property (“Ukrpatent”) within 8-10 months from the date of filing. The utility model patent provides its owner with the same rights as the owner of a patent for an invention.

At the moment, products (both devices and substances), processes, and new applications of existing products or processes can be patented as utility models. Under the Draft Laws, the list of utility models objects is limited only to devices. Basically, this makes it impossible to register, for example, active substances of pharmaceutical and agrochemical preparations, or the methods of their manufacture. After the adoption of the Draft Laws, such objects should be patented only as inventions. New forms of prior art drugs, as well as a new dosage or new use of known drugs, may not be patented as inventions. Such initiative is primarily aimed at combating so-called “evergreen patents.”

The Ukrainian legislator is also establishing an analogue of the Bolar provision, which allows pharmaceutical companies to apply to register a generic drug before the original drug’s patent expires.

While patents may still be invalidated in court, the Draft Laws also empower the Appeals Chamber of the Ministry for Development of Economy, Trade and Agriculture (the “Appeals Chamber”) to invalidate invention patents.

Changes to the Protection of Industrial Design and Trademarks

An industrial design may be protected as an unregistered design if it is brought to the awareness of the general public as prescribed by law. The term of this protection is three years from the date of its public notice in Ukraine. This is a long-awaited improvement for products from small and medium businesses with life cycles not exceeding 2-3 years.

The Draft Laws make it impossible to register marks which are identical or confusingly similar to trademarks used by another legal person in a foreign country if the application is submitted in bad faith (which includes those filed by representatives of a person without his/her permission).

Such changes in the current legislation facilitate an effective protection of brands which operate successfully in foreign markets but have not yet been launched in Ukraine. When entering the Ukrainian market, such right-holders often face situations in which their trademarks are already registered here. In this respect, they are often forced either to start expensive legal procedures or to buy a trademark from an unfair owner.

Under the Draft Laws, third parties may not only file oppositions regarding applications for trademarks, but also appeal final decisions of Ukrpatent in the Appeals Chamber without first referring to a court. At the same time, Ukraine does not recognize the concept of so-called post-grant oppositions in relation to trademarks. If an interested party fails to file an opposition in due course, he/she may invalidate the trademark certificate only in court. As a result, services for tracking submitted applications are becoming increasingly important.

One more expected provision is the opportunity to demand a fine of 10 to 50,000 minimum wages (from USD 1,750 to USD 8.7 million) in case of a certificate invalidation and the violation of third parties’ rights being established by the court.

Although the results of all of the above are yet to be seen, these legislative improvements demonstrate Ukraine’s readiness to follow the European standards of IP protection and will definitely benefit fair businesses.

This Article was originally published in Issue 7.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Since 2008 joint stock companies in Ukraine have functioned under a special corporate governance law (the “JSC Law”), which has improved through the course of its existence. Year after year, with the help of the SEC and the business community, Ukrainian legislators have introduced profound amendments to the law to bring corporate governance in JSCs in Ukraine closer to European standards, to attract foreign investments, and to insure adequate protection of rights of various stakeholders (minority shareholders, creditors, etc.) As a result, Ukraine has moved up in the World Bank’s Doing Business ranking, and in 2020 the country ranks 64th in the ease of doing business and 45th in the minority shareholders protection component.

At the end of 2019, a new draft law on JSCs (the “New JSC Law”) was registered in the parliament of Ukraine, and it is now being debated. In essence, this draft codifies and streamlines the changes to the JSC Law that have been made since its enactment. The New JSC Law also provides solutions for urgent problems which have been revealed during the JSC Law’s implementation consistent with the best practices of developed economies and European standards.

So, what major changes would the New JSC Law introduce?

One-Tier Governance Structure: Currently, most JSCs in Ukraine are required to have a “two-tier” structure of corporate governance, consisting of a supervisory board and an executive body (either collegial or single-person). The exception is private JSCs with fewer than ten shareholders. Under the New JSC Law, the majority of JSCs would have the option to choose between the “two-tier” structure and a “one-tier” structure (consisting of a board of directors only, to include executive and non-executive directors/officers). This one-tier approach is seen as proportionate to the size of JSCs, company social value, and type of business model.

Electronic Voting by Shareholders: Although the JSC Law provides for absentee voting (polling) by the shareholders, its implementation is practically impossible. As a result, the only way to hold a general meeting of shareholders in JSCs in Ukraine is to organize the physical presence of all shareholders in one place. The New JSC Law aims to rectify this situation by establishing an electronic voting procedure with software and technical tools to be developed by the central depository. In addition, a simplified convocation procedure for the general shareholders’ meetings will be introduced for use with electronic voting.

Enhances Liability of JSC Officers: The New JSC Law improves the mechanisms to hold company officers liable for damages they cause to the company. In particular, damages caused by a breach of fiduciary duties should be recoverable, provided a court declares the relevant transaction invalid and the company’s officers liable. The New JSC Law also establishes limitations on taking positions in JSCs and allows for the early dismissal of company officials who cause damage to a JSC.

Corporate Governance for Professional Participants of Capital Markets

Statutory corporate governance standards for professional participants of capital markets currently do not exist in Ukraine, apart from the banking segment of the financial sector. Under the New JSC Law, the corporate governance requirements of Europe’s MiFID II and Capital Requirements Directive will be applied to Ukrainian investment firms, creating a risk-oriented supervision model.

The other proposed changes relate to expanding the ability of minority shareholders of JSCs to file derivative claims, and granting such right to shareholders of LLCs. Under a derivative claim, a shareholder may file a claim in the interests of the company for damages caused to the company by actions or omissions of the company officers. The New JSC Law also introduces mechanisms related to the determination of minimum share price and squeeze-out counterbid options and simplifies statutory reorganization and liquidation provisions to bring them in line with respective EU directives. The New JSC Law would also introduce the position of corporate rights counsel and further improve the function of corporate secretaries in JSCs.

The New JSC Law has been prepared as part of the ongoing corporate governance reform aimed at harmonizing Ukrainian legislation with EU regulations. The proposed changes have also long been sought by Ukraine’s business community. Once adopted, the New JSC Law will provide for more flexible, competitive, and transparent JSC business activity in Ukraine.

This Article was originally published in Issue 7.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Daniel Bilak is the former Managing Partner at CMS Kyiv, Chairman of UkraineInvest, and new Senior Counsel at Kinstellar, on his diverse background and fascinating career.

CEELM: Run us through your background, and how you ended up in your current role.

Daniel: I’ve been in Ukraine for 30 years. It’s been fun – a wild ride, and I’ve loved every minute of it.

I’ve been in the Ukrainian government several times in advisory roles, advisor to two Prime Ministers, and Ministers of Justice. In September 2016, Prime Minister Volodymyr Groysman asked me to help him attract foreign direct investment to the country. As mayor, he had essentially turned Vinnytsia, a mid-sized city in central Ukraine, into the poster child of what a Ukrainian city in Europe should look like, and he wanted to replicate this on a national level. I agreed and in October 2016 we founded UkraineInvest as the government’s investment promotion agency and I was appointed by the Cabinet of Ministers as its first Director and the Prime Minister’s Chief Investment Advisor. It turned out to be one of those rare occasions in my life where I think I’m satisfied that I basically achieved what I set out to do. I had three key objectives: I told the Prime Minister that before we started targeting new investors, we had to fix the problems experienced by existing investors and to turn them into apostles to evangelize Ukraine to new investors. Next, we needed to improve the investment environment by making systemic changes to doing business in the country. Thirdly, I wanted to securely institutionalize UkraineInvest within the government, so that it would continue to perform effectively regardless of whether I was in charge or regardless of who was Prime Minister – it had to remain a professional and reliable service for all investors. While there are always things you’d like to do better, I think that over the last three years we basically achieved these objectives. I’m extremely proud of the young professional and dedicated team we put together. I told them they weren’t being hired for a job – they were on a mission. And they acted that way. Investors were very pleased with their efforts and results.

I left UkraineInvest at the beginning of March this year. I’m currently working with investors, helping them identify good-value investments projects in Ukraine and the CEE region. I’m also quite excited to have been recently appointed Senior Counsel at Kinstellar to advise and support the firm-wide management team on the further growth and development of their legal practice in CEE, Ukraine, and beyond. I’m an Emerging Markets guy – I love the challenge of connecting people who may not otherwise come together to create something interesting and of value.     

As for how I came to Ukraine in the first place, that’s an interesting story. I was born in Canada and grew up speaking Ukrainian. My father came to Canada after the Second World War, while my mother was born in Canada to Ukrainian immigrants. When Ukraine declared its independence in 1991, I was an associate at the Toronto law firm, Faskens. As a new nation, Ukraine wanted its own currency, the hryvnia, as an attribute of sovereignty. Just as I was preparing to travel to Ukraine for the first time to scope out opportunities, I read in the paper that the currency was to be printed in Canada by the Canadian Bank Note Company out of a CAD 50 million line of credit Canada had extended to the Ukrainian parliament. It turned out that the CBNC was a client of ours!  So, I called them up and I said “Look, I’m going over to Ukraine today, and I read this article, and if there’s anything I can do for you while I’m over there, let me know.” About 20 minutes later the CEO of the company called me, and I was retained! So, quite serendipitously, I got involved in the printing of the hryvnia, in Canada!

As this was a high-profile project, I got to know many people in Ukraine, and quite quickly I became more deeply engaged with the country. I helped start a legal foundation that George Soros ended up supporting. The Ukrainian head of our foundation then became Minister of Justice and asked me to come in as his principal advisor to implement the many obligations undertaken by Ukraine pursuant to its Terms of Accession to the Council of Europe. I essentially became his Chief of Staff. That was in 1994 and we had another stint in our respective roles in 2005-2007.

The career I’ve had, nobody could plan. As we say in Canada, I just had to “throw the canoe in the water and shoot the rapids.” It’s been a wild ride living the building of a nation!

CEELM: Was it always your goal to work in Ukraine?

Daniel: Let me tell you, had someone told me when I graduated from law school in 1986 that my career would largely be focused on Ukraine, I would have had that person committed to a funny farm. It was still the Soviet Union! Nobody expected even an association with the country, let alone a career! It was sort of out there. I got here on the ground floor through my profession, through the opportunity to facilitate the printing of Ukraine’s currency.

CEELM: How would clients describe your style?    

Daniel: You’d have to ask my clients! I think they would say – I’m recalling some client reviews – I’m a tenacious defender of a client’s interests. And I always try to be very commercial in my advice. When I was Managing Partner of CMS Cameron McKenna’s Ukraine office, I always told the lawyers that this market is full of good practitioners. That’s not enough to win clients. They will hire a lawyer that understands their business. What clients want from us is sound, practical, commercial advice that helps them mitigate the risks of doing business in an emerging market. You need to contextualize the advice you give. It sounds like a penetrating glimpse into the obvious, but, especially in the early days, a lot of Ukrainian lawyers thought lawyering was just about telling the clients what they couldn’t do under the law, which, of course, is insufficient. 

CEELM: Do you have any plans to move back to Canada?    

Daniel: Not really. I have older children in Canada, and up until two months ago [when the COVID-19 pandemic hit] I was a frequent traveler back to Canada. Now it’s not clear when we’ll be allowed to travel internationally again. But my wife and younger children are here. Emerging markets is what I do – I don’t know what I’d do if I went back.

CEELM: Outside of Ukraine, which CEE country do you enjoy visiting the most, and why?     

Daniel: It’s not in the region, but I really love London. I hope the post-COVID version is just as much fun.

In the region I find, frankly, all the countries fascinating. I am very partial to Bulgaria, because I ran a big project there in 2001-2003, after my first tour in the Ukrainian Ministry of Justice. I was sent to Bulgaria as a senior governance advisor under the auspices of the UNDP to do an anti-corruption report – these recommendations became part of the Justice and Home Affairs Chapter negotiations prior to Bulgaria’s joining the EU and ultimately resulted in the adoption of a new Bulgarian Administrative Procedure Code. I spent the better part of two years there and came to really appreciate the country and its people. The same would probably be true if I spent two years in Romania or other countries. I’m fascinated by all of the CEE countries!     

CEELM: What’s your favorite place to take visitors in Kyiv? 

Daniel: It’s not really a “favorite” place, but I always take visitors to Independence Square – the Maidan. I have this walking tour of Kyiv that I do for visitors, and it always starts with the Maidan – because it is key to understanding Ukraine today. I show them where the encampment was and the bullet holes in the lamp posts where the snipers shot protesters in 2014. Then we walk 500 meters up the hill back to the XI century, to the St. Sophia Cathedral, built when Ukraine took Christianity from Constantinople and made its civilizational choice to be part of Europe.  Those two places, so close together, are historical bookends – they depict the Ukrainian people’s thousand-year quest for freedom and self-determination as part of the European family of nations. 

This is also part of the narrative about Ukraine I tell investors. Ukraine essentially began building the institutions of a democratic state from scratch in 2014, after the Maidan, and Russia’s annexation of Crimea and invasion of the Donbas. No country anywhere has done more in the past six years to transform its economy and society than Ukraine has. In fact, by 2019, investors were telling us that these reforms, and Ukraine’s deep integration into the EU economic architecture, had made Ukraine a stable and predictable emerging market with a solid investment story.

I’m convinced that Ukraine’s two key advantages – “brains and grains” – will be the drivers behind unique opportunities for Ukrainians in the new post-COVID regional and global economic order.

This Article was originally published in Issue 7.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Ukrainian renewable energy lawyer Svitlana Teush takes a look at the law which will define the cuts to be applied in Ukraine after extensive negotiation between government and the clean energy industry.

Yesterday, long-awaited draft law No. 3658 On the Amendments to Certain Laws of Ukraine on the Improvement of Support for the Production of Electricity from Alternative Energy Sources (Law), was adopted by the Ukrainian parliament following its second and final reading. Adoption concluded a lengthy negotiation process about restructuring the feed-in tariff (FIT) support mechanism for renewables in Ukraine, with the stated aim of improving the FIT’s sustainability and supporting market liquidity.

The negotiations involved key policymakers and industry players and were facilitated by the Energy Community Secretariat through a formal mediation procedure which produced a memorandum of understanding that provided the basis for elaboration of the law. The law essentially reflects the key arrangements found in the memorandum, representing a compromise between the government and the industry. Notably, terms for those solar projects which are under construction and hold signed preliminary power purchase agreements (PPAs) have been improved by the law, compared to the memorandum, enabling those projects to be continued on fairly acceptable terms.

The following summary is preliminary and based on the text submitted to the parliament for the second reading and discussed during the parliamentary hearing. However, changes are still possible during preparation of the final text prior to its signing.

The law will become effective following its signing by the president and official publication.

1) Reduction of the FIT. The law provides for reduction of the FIT, which should be implemented through the relevant decisions of the energy regulator based on the reduction factors – decreasing coefficients – established by the law. These reduction factors depend on the source of energy, installed capacity and date of commissioning of a facility, as set out in the table below. A producer cannot opt out of the reduction factors as they are mandatory for projects under the FIT. The reduction applies to projects on a forward-looking basis.

The following adjusted rates of the FiT will apply after the law becomes effective.

WIND*

(*where the installed unit capacity of a wind turbine is equal to, or exceeds, 2MW):

• commissioned from 01.07.2015 until 31.12.2019: 9.41 EURc/kWh (equal to a 7.5% reduction)
• commissioned from 01.01.2020: 8.82 EURc/kWh (equal to a 2.5% reduction)

SOLAR

Ground-based >1MW:

• commissioned from 01.07.2015 until 31.12.2015: 14.41 EURc/kWh (equal to a 15% reduction)
• commissioned in 2016: 13.59 EURc/kWh (equal to a 15% reduction)
• commissioned in 2017-2019: 12.77 EURc/kWh (equal to a 15% reduction)
• commissioned from 01.01.2020 until 31.10.2020: 10.97 EURc/kWh (equal to a 2.5% reduction)
• commissioned from 01.11.2020 until 31.12.2020: 7.88 EURc/kWh for projects of <75MW (equal to a 30% reduction) or 4.5 EURc/kWh for projects of >75 MW (equal to a 60% reduction)
• commissioned from 01.01.2021 until 31.03.2021: 7.62 EURc/kWh for projects of <75MW (equal to a 30% reduction) or 4.35 EURc/kWh for projects of >75 MW (equal to a 60% reduction)
• commissioned from 01.04.2021 until 31.12.2021: 4.35 EURc/kWh (equal to a 60% reduction)**

Ground-based <1MW

• commissioned 01.07.2015 – 31.12.2015: 15.69 EURc/kWh (equal to a 5% reduction)
• commissioned in 2016: 14.79 EURc/kWh (equal to a 7.5% reduction)
• commissioned in 2017-2019: 13.89 EURc/kWh (equal to a 7.5% reduction)
• commissioned in 01.01.2020 – 31.12.2020: 10.97 EURc/kWh (equal to a 2.5% reduction)
• commissioned 01.01.2021 – 31.12.2021: 10.61 EURc/kWh (equal to a 2.5% reduction)
• commissioned 01.01.2022 – 31.12.2022: 10.24 EURc/kWh (equal to a 2.5% reduction) **

** Starting from 1 January 2022 – the FIT is no longer available after two years from the signing of a pre-PPA for solar of over 1MW. The FIT for solar with capacity of ≤1MW will be further reduced depending on the date of commissioning of a plant. For the sake of simplicity, we do not consider further reductions of the FIT for small solar above.

For all power produced from renewable energy sources (RES) under the FIT that were commissioned on or before June 30, 2015, the FIT should be capped at approximately €0.24/kWh. If lower than or equal to the maximum cap, the FIT is multiplied by a coefficient of one.

The same coefficient applies to all RES not mentioned above, including, among others, biomass, biogas and hydropower projects. Therefore, the FIT rates applicable to such other RES have not been changed with the adoption of the law.

2) The term of the FIT. The law does not provide for extension of the term of the FIT, although this option had been previously discussed. Therefore, the FIT will continue to apply until December 31, 2029, as previously established.

3) Local content bonus. The law increases the local content bonus to 20%, payable as an increment to the FIT or the auction price, as relevant, where a producer uses at least 70% of locally produced equipment. This is in addition to the existing local content bonus of 5% for projects using at least 30% – and less than 50% – of locally produced equipment; and 10% for projects using at least 50% of locally produced equipment. In auctions, a 20% local content bonus will only be available for the first five years from commissioning of a project, following which the local content bonus is capped at 10%.

4) Balancing responsibility. The law accelerates the balancing responsibility for power plants with a capacity of more than 1 MW as follows:

• 50% from January 1, 2021; and
• 100% from January 1, 2022.

This is subject to tolerance margins of 10% for wind and 5% for solar.

For plants with a capacity not exceeding 1 MW, the balancing responsibility will be gradually introduced, starting at 10% next year and increasing by 10% annually until it reaches 100% in 2030; the tolerance margins stated above are also applicable.

The government should, within three months of enactment of the law, submit the draft law entitling RES producers to quit the offtaker’s balancing group – in which group, RES producers under the FIT or auction price must currently participate – and to freely sell electricity and be compensated for the difference between the FIT or auction price and the market price, but not lower than the price on the day-ahead market.

5) Compensation for curtailment. Currently, Ukrainian legislation does not provide detailed guidance to curtailment-related procedures, including compensation for curtailment and the designated body responsible for it.

To address the matter, the law introduces a mechanism of provision by RES producers of load reduction services to the electricity transmission system operator (TSO). The cost of such services should amount to the FIT or the auction price, as appropriate, payable to RES producers for the volumes of under-supplied electricity following TSO curtailment orders. The relevant costs of the TSO, payable to RES producers, should be included in the transmission tariff of the TSO. Therefore, it should be the TSO which will be responsible for the payment of curtailment compensation to RES producers at the FIT or auction price.

The procedure for the provision of such services – including the order of priority in the acceptance of offers for load reduction services – as well as the methodology of calculation of electricity volumes under-supplied by RES producers following the TSO orders for curtailment, should be approved by the energy regulator and included in the market rules within a month of enactment of the law.

The above compensation mechanism for curtailment through the cost of relevant load reduction services of RES producers, does not apply where curtailment is ordered by the TSO for power system constraints caused by force majeure.

6) Stabilization clause. The law contemplates certain changes to the law of Ukraine On the Regime of Foreign Investment with regard to the state guarantee and the stabilization, or “grandfathering”, clause. It is maintained that the rights and obligations of parties to PPAs under the FIT should be governed by legislation effective as of the date of enactment of the relevant law, save for changes in law relating to defense, national security, tax legislation, public order or environmental protection. The state guarantees that from July 1, 2020 until December 31, 2029, the FIT will not be changed or cancelled, and the reduction factors to the FIT will not be changed or applied in a way entailing damage or losses or deprivation of an investor’s legitimately-expected revenues.

The state guarantee of foreign investment related to the FIT shall apply for the entire period of the FIT.

7) Financing offtaker payments of the FIT. As a measure designed to improve the offtaker’s liquidity, the law extends the list of potential sources of financing for the offtaker’s costs related to payments of the FIT to RES producers. Currently, they include financing at the cost of a special surcharge to the transmission tariff payable by the TSO to the offtaker for its services, related to the increase of the RES share in electricity production.

The government will be able to provide funds in the state budget for the financial support of the offtaker in an amount of not less than 20% of the estimated electricity production from RES in the relevant year. This would be possible based on the budget requests submitted by the Ministry of Energy, together with the supporting calculations of the energy regulator.

It also allows the temporary allocation of 70% of the proceeds raised by the TSO from the allocation of cross-border capacities as at July 1, 2020 for paying the offtaker; the offtaker must then allocate 50% of these funds to pay RES producers under the FIT.

The plan is to develop and submit to parliament, within three months following enactment of the law, draft laws contemplating issuance of government domestic bonds to support offtaker settlements with RES producers.

8) Changes to the auction system. The law amends the regulatory framework for renewable energy auctions, which are expected to be launched next year. These amendments are mainly designed to improve market competition and access to auctions, as well as to provide the government with the greater flexibility needed for decision-making – for example, when determining and allocating quotas. Auctions will provide yet another support mechanism for renewables, the key attraction being the auction price will be fixed for 20 years and referenced to the euro.

The general trend discernible behind most of the changes above, is toward diversification of support mechanisms for renewables in Ukraine; improving market competition, liquidity and sustainability in the long term; and reducing costs incurred in electricity production, system balancing and the integration of renewables. This follows global market patterns and is key to accomplishing, and maintaining, new promise for renewables in Ukraine.

Svitlana Teush, PhD, is counsel for energy, construction and infrastructure at the Redcliffe Partners independent law firm, which previously operated as the Kyiv office of international firm, Clifford Chance. She has practised law for more than 15 years, supporting projects in the energy, construction and infrastructure sectors. Since the introduction of the FIT in Ukraine in 2009, Teusch has been supporting renewable energy projects in the country and has advised on associated issues of land use; construction; grid connection; regulatory licenses and permits; contracts for engineering, procurement and construction and operations and maintenance services; and application of the FIT, bonuses and other elements of state support for renewables. She is a contributing expert of the Ukrainian Wind Energy Association; a member of the supervisory board of the Bioenergy Association of Ukraine and a member of the national ICC Commission on Environment and Energy in Ukraine.

This article was amended on 22/07/20 to reflect the maximum FIT payable to renewables projects installed on or before June 30, 2015 will be €0.24/kWh, not €0.22, as previously stated.

By Svitlana Teush, Counsel, Redcliffe Partners 

Acting on behalf of Challenge Shipping Ltd., the Odesa office of Ilyashev & Partners has secured the acceptance by Ukraine’s State Ecological Inspection of a British protection and indemnity club’s letter of undertaking as a sufficient security for a maritime claim.

Challenge Shipping Ltd. is the owner of the bulk carrier New Challenge, which was detained at the Port of Mykolaiv on July 17, 2020 in connection with an incident taking place involving cargo offloading.

According to Ilyashev & Partners, on July 12, 2020, “when unloading a 12-ton forklift from New Challenge, due to a breakage of the rope on a ship’s crane hook, the forklift fell on the berth from a height of four meters, which resulted in significant damage to the berth and a pipeline of the neighboring oil terminal. As a result, about ten tons of sunflower oil spilled on the berth, some of which got into the port water area, which led to the New Challenge captain being held administratively liable for the environmental pollution, as well as to a claim exceeding UAH 5 million. The total amount of claims against the vessel amounted to about UAH 13.5 million.”

Ilyashev & Partners Attorney at Law Sergey Nedelko reported that the firm was able to “persuade the State Ecological Inspection of Ukraine to accept the P&I club’s letter of undertaking as a security in respect of a maritime claim that fully meets the world’s best maritime practice. This allowed the vessel to leave the port safely and the shipowner to avoid huge losses.”

According to Ilyashev & Partners, “despite the fact that starting in the 19th century letters of undertaking of P&I clubs are widely used to secure maritime claims in many jurisdictions, their status is not yet regulated by the Ukrainian law.”

Olena Kuchynska has been appointed the new Managing Partner of the Kinstellar’s Kyiv office.

Kuchynska takes over from departing Kostiantyn Likarchuk, who, the firm reports, “oversaw the emergence of Kinstellar as one of Ukraine’s leading legal practices since our entry into the Ukrainian legal market in 2016.”  

Kuchynska, who has nearly 20 years of experience, leads Kinstellar’s Energy and Corporate practices in Kyiv. According to Kinstellar, she “will be supported in her new role by Partner Iryna Nikolayevska, who heads the Corporate, M&A, and Compliance practice.”

Kuchynska holds an LL.M. from the Central European University in Budapest and a Specialist degree in Law from the National University of Ostroh Academy. Before joining Kinstellar in 2016, she spent two years as a project officer with the OSCE, almost a year and a half with the Silecky law firm, and eight and a half years with Baker McKenzie.

“I am grateful to the firm’s management for their confidence in me to take on this new challenge and responsibility,” commented Kuchynska. “With our incredibly talented, dynamic, and dedicated team in Kyiv, we will continue to deliver the top-quality support our clients expect from us as we strive to take the Kinstellar Ukraine practice to a new level of success.”

“The firm has tremendous confidence in our outstanding Kyiv team and we remain committed to supporting them as we continue to expand our full-service regional offering to clients across our ten jurisdictions,” commented Patrik Bolf, Kinstellar’s Global Managing Partner.

Integrites has represented Metro Cash & Carry Ukraine in a dispute with a former energy supplier who filed a claim against one of the company’s stores demanding that it be fined for changing its electricity supplier.

A firm press statement explained that both the “Law of Ukraine on the Electricity Market and Directive 2009/72/EC on the common rules for the internal market in electricity are in effect in Ukraine. They provide consumers with an opportunity to voluntarily choose and change the electric power supplier. At the same time, controversial norms in by-laws make possible attempts of many suppliers to collect fines from their former customers.”

“The goal of Integrites and our clients is to develop the relevant court practice in a way that will make it impossible to punish those consumers who use their right to change their energy supplier,” commented Integrites Partner Oleksandr Onishchenko.

Aside from Onishchenko, the Integrites team working on the case included Senior Associates Serhii Rymar and Anton Kaganets.

Redcliffe Partners has helped Saudi Basic Industries Corporation obtain merger clearance from the Ukrainian competition authority for the USD 69.1 billion sale of 70% of its shares by the Public Investment Fund of Saudi Arabia – the sovereign wealth fund of the Kingdom of Saudi Arabia – to the Saudi Arabian Oil Company. 

Redcliffe Partners describes the Saudi Basic Industries Corporation as “a global leader in diversified chemicals headquartered in Riyadh, Saudi Arabia.” According to the firm, “it manufactures on a global scale in the Americas, Europe, Middle East, and Asia Pacific. The company has operations in over 50 countries with a global workforce of over 33,000 employees.”

“This transaction is the largest ever M&A deal in the Kingdom of Saudi Arabia and the Middle East by deal value,” the firm reports.

Redcliffe Partners’ team included Partner Anastasia Usova, Senior Associate Nataliya Kovalyova, and Associate Tetyana Smurova.

Editor’s Note: After this article was published, Sayenko Kharenko announced that it had served as Ukrainian legal counsel to Saudi Aramco in “obtaining merger clearance in Ukraine for its USD 69.1 billion acquisition of a 70 percent stake in Saudi Basic Industries Corporation from the Public Investment Fund, the sovereign wealth fund of Saudi Arabia.”

Sayenko Kharenko’s antitrust team on the project was led by Partner Valentyna Hvozd and included Senior Associate Anastasia Bodnar and Associate Snizhanna Savka.

Vasil Kisil & Partners’ has successfully represented McDonald’s Ukraine in a case against the Ukrainian League of Copyright and Related Rights.

According to Vasil Kisil & Partners, “the ULCRR filed a lawsuit against McDonald’s, seeking remuneration for the public performance of phonograms in the chain’s restaurants. ULCRR is the only accredited collective management organization authorized to collect remuneration for this type of phonogram use in Ukraine. The plaintiff contended that McDonald’s was obliged to enter into an agreement with the plaintiff, regardless of the actual circumstances of use. However, McDonald’s entered into remuneration agreements directly with the holders of related rights to phonograms and performances. The rights holders withdrew their rights from the management of ULCRR, which is why the latter had no right to collect remuneration for their phonograms. The courts of two instances dismissed the ULCRR’s lawsuit, and the Supreme Court refused to commence a cassation proceeding.”

Vasil Kisil & Partners’s team consisted of Counsel Ilarion Tomarov and Associate Daria Romashchenko.

Redcliffe Partners has advised the EBRD on an up to EUR 25 million term loan to be provided to Ukrainian State Air Traffic Services Enterprise for working capital needs.

Redcliffe Partners’ team included Managing Partner Olexiy Soshenko, Senior Associate Evgeniy Vazhynskiy, and Associate Eduard Olentsevych.